Pensions Act 2004

[F1 38C Section 38 contribution notice: meaning of “employer insolvency test” E+W+S

(1) For the purposes of section 38 the employer insolvency test is met in relation to an act or failure to act if the Regulator is of the opinion that—

(a) immediately after the relevant time, the value of the assets of the scheme was less than the amount of the liabilities of the scheme, and

(b) if a debt under section 75(4) of the Pensions Act 1995 (deficiencies in scheme assets: employer insolvency etc) had fallen due from the employer to the scheme immediately after the relevant time, the act or failure would have materially reduced the amount of the debt likely to be recovered by the scheme.

(2) For the purposes of subsection (1)—

(a) the value of the assets of the scheme immediately after the relevant time is the value which the Regulator estimates to be their value,

(b) the amount of the liabilities of the scheme immediately after the relevant time is the amount which the Regulator estimates to be the amount of those liabilities, and

(c) the amount of the debt is the amount which the Regulator estimates to be the amount of the debt under section 75(4) of the Pensions Act 1995 that would have fallen due immediately after the relevant time.

(3) When estimating the value and the amounts referred to in subsection (2), the Regulator must take into account how assets and liabilities, and their value or amount, are determined and calculated for the purposes of section 75(4) of the Pensions Act 1995.

(4) When estimating—

(a) the value of the assets of the scheme immediately after the relevant time, and

(b) the amount of the debt under section 75(4) of the Pensions Act 1995 falling due immediately after the relevant time,

the Regulator must disregard the amount of any debt due immediately after the relevant time from the employer under section 75 of the Pensions Act 1995.

(5) In this section “the relevant time” means—

(a) in the case of an act, the time of the act, or

(b) in the case of a failure to act—

(i) the time when the failure occurred, or

(ii) where the failure continued for a period of time, the time which the Regulator determines and which falls within that period;

and, in the case of acts or failures to act forming part of a series, any reference in this subsection to an act or failure to act is a reference to the last of the acts or failures in that series.]

Textual Amendments

F1 Ss. 38C, 38D inserted (1.10.2021) by Pension Schemes Act 2021 (c. 1), ss. 103(3), 131(1); S.I. 2021/950, reg. 2(5)(a) (with reg. 3(1)(2))